from the can-we-explain-the-internet-to-you? dept

And I thought Ed Whitacre had moved on to run United States General Motors. You may recall that, half a decade ago, when Whitacre was running SBC (prior to its takeover of AT&T), he made sure that a lot more people heard the term "net neutrality," after he claimed that SBC should charge Google and other big online companies. His explanation was that Google and Yahoo and others were "reaching" his customer's for free. This is, of course, wrong. Very, very wrong. It's actually an attempt to double charge, based on the false belief that when you pay for your internet connect, you are only paying for the connection into the cloud, but then not out to any end point. Google is not getting anything for free. It pays (and pays a boatload) for its bandwidth. What Whitacre was trying to do back then was double dip and get everyone to pay twice for their bandwidth. The reasoning was so bizarre that you would have hoped it had died off by now.

No such luck.

Alan Gerow points us to the news that Spanish telco Telefonica's President Cesar Alierta, appears to be channeling Whitacre, by claiming that big sites like Google and Yahoo get too much bandwidth "for free" and he wants to start charging them for it. Just like Whitacre, he's really looking to double dip. Google pays for its bandwidth. What Alierta really means is he wants Google to pay again just to reach his customers over the bandwidth the customers have already paid for. The claim that Google, Yahoo or any of those companies are getting their bandwidth "for free" is ludicrous. But since Alierta believes that Google is getting bandwidth for free, perhaps he'll agree to pay Google's bandwidth bill.

from the if-you-can't-beat-'em dept

American mobile operators' advertising is still dominated by claims about their network coverage, from the "Can You Hear Me Now?" guy to consistent sniping about whose network is bigger. But in Europe, competing on coverage largely went out years ago, thanks to smaller geographic areas to cover and denser populations, while converging on a single technology didn't hurt, either. Some operators there have gone so far as to embrace network sharing, where they collaborate on their infrastructure with their rivals to cut costs. Vodafone and Telefonica have announced the biggest network-sharing deal so far, saying they'll jointly build new cell sites and consolidate existing ones in several countries across the continent. Network sharing is seeing renewed interest as operators look to trim their capital expenditures, but it can benefit consumers as well. In one sense, a lot of spending is duplicated by rival operators as they build out network footprints that are roughly equivalent; significantly reducing that cost would have a big impact on their businesses, and allow them to redirect some of those resources elsewhere. As a Telefonica exec says, "by reducing our costs in areas of the business that customers don't see, we can ensure that we invest in areas they truly value." Thus far, many operators' response to the commoditization of their product has been to try and differentiate on coverage; eliminating that factor could spur them to differentiate in other ways, such as with new and better services.